Twice in the past month I had 2 buyers change the terms of the domain name transaction after we had agreed and I had setup the escrow transaction.
In these 2 cases both changed their minds and wanted to pay through a company. And I am sure that this was not because they had something to hide during negotiations.
But I have had many different things happen to me over the years. The least effect that a change of terms is me wasting my time but I could end up also be losing a big percentage of my profit.
A change in the terms could be anything of these and more:
- Asking me to pay less than what we agreed because of any excuse you can think of
- A change in the time frame agreed for payment or asking for installments
- A change in currency
- Changing escrow companies or asking to pay by paypal
- Asking me to pay for the escrow fees after several emails stating clearly that the buyer pays the escrow fee
- Adding another domain in the deal
- Change the country of the buyer
- Asking for an NDA or asking me to draft an agreement
- Asking for the domain name to be transferred to a dodgy Chinese registrar after we have agreed on a push
- Paying through a company even if though I have asked them specifically if they own an European Union company (this only applies to European transactions)
In the first transaction the buyer said that they would be using a company in another country to make payment. That was after the had created an escrow.com personal account and verified it. That of course is not permitted by escrow.com. The name from the bank account that the money are going or coming from must be the same as the escrow.com account name.
So they had to create a new account with the company details and verify that account. And company verification requires more paperwork and even more paperwork if it is from a non-English speaking country. It turns out that the funds arrived at escrow.com and we were waiting for the verification for about 3 weeks. The delay was from the buyer as when they submitted the papers they were verified on the same day.
In the second transaction the buyer was from Germany. I immediately asked him if he had a valid VAT number. He said no. So we did the negotiations thinking he had to pay a 24% VAT tax. In the middle of the negotiations he added a second domain in the deal which was a bad sign. We continued, agreed on a price for both domains and I created the escrow transaction. He then said that he found a company in Bulgaria so he could pay through it and that way he wouldn’t be charged with VAT tax. I said that this could not be.
Reason one was because I gave him a 10% discount thinking he had to pay for the 24% VAT tax. Reason 2 was that I am not even sure if he is affiliated with this company and that will create even more problems down the line, either with escrow.com or with my tax office and the European Union invoice and VAT requirements. My accountant is really hesitant when he sees invoices from or to countries that are believed to be tax heavens (like the Cayman Islands) and Bulgaria, together with Cyprus, are the 2 top countries where Greeks go to create new companies. We finally agreed with the sale but without the 10% discount.
All these changes create unnecessary friction with many emails and support tickets.
must be something in the air. I’ve had more people flake on me this year than I’ve had in the last ten.
Sometimes the terms change because they failed to do all their research prior to negotiation and uncover new information in the middle of negotiations or during the finalization of the agreement. In either case, once an agreement between both parties has been struck, neither party should be able to back out of that deal. The sad reality is that if there is no failsafe (Mediator), the deal can be lost with no repercussion to the party that flaked out and violated the terms of the agreement. Using a trusted mediator/marketplace at least provides a repercussion and has both parties thinking twice before putting their reputation on the line.
If they pay by PayPal and cover the fee, is that not good? Or is there this risk I’ve seen some mention of a payment reversal after the domain is transferred?
(Only talking about “verified” PayPal payer. For example, I once sold one for $1k plus the fee and it went well.)
I would NEVER use Paypal, too many accounts of them freezing your money for 180 days.
I do not understand why someone would move from Germany to Bulgaria when latter is 20%, better to move to a completely offshore structure.
To be honest I have changed the recipient of the deal a few times, this was for tax purposes, both capital gains and moving it outside EU and their disgusting tax regime. In these situations the prices of the domains went far higher than I had expected, my bad.
Never had a problem with them, buying or selling. In fact they seem quite preferable sometimes.
Move to Canada Konstantinos. ?
Nice article and Happy holidays !
“Asking for the domain name to be transferred to a dodgy Chinese registrar after we have agreed on a push”
How is the above a concern? Just sold a domain to a Chinese guy and payment is via escrow.com. He is asking for transfer codes and does not want a push. I don’t know where he is going to transfer. Should I be concerned based on your above comment?
Thanks for your help.
What happens when he transfers to a crazy registrar and uses whois privacy and then says to escrow.com that he does not have the domain…?
You can eliminate all this angst by simply giving up negotiating with prospective buyers altogether and just setting BIN prices on your domain names at a marketplace like Uniregistry Market. Let the buyer figure it all out at check out; you don’t need to be there to help them — let the marketplace customer service help them get the transaction completed. Uniregistry Market charges 10% for its BIN services so just increase your BIN prices accordingly. Meanwhile, your domain name remains available for sale if another buyer with his or he act together gets the transaction completed faster than the slower buyer.
Anon, why not deploy your own pages and bin, so you actually have real time data on the many iterations the prospect will have on your domain ..?
Ahh, talk about timing. I am facing that as we speak. I’m hoping it works out and I can close my first 2018 sale. This article was very handy and the timing was perfect. Thanks, Brian